Labour Court Database __________________________________________________________________________________ File Number: CD94166 Case Number: LCR14526 Section / Act: S26(1) Parties: PENN RACQUET SPORTS LIMITED - and - SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION |
Claim for a wage increase under a cost saving programme.
Recommendation:
Having examined the submissions from the parties and taking into
account the circumstances at present pertaining in the industry,
the Court has considered it would not be justified in recommending
concession of the Union's claim for an increase in basic rates.
Division: Ms Owens Mr Keogh Mr Rorke
Text of Document__________________________________________________________________
CD94166 RECOMMENDATION NO. LCR14526
INDUSTRIAL RELATIONS ACTS, 1946 TO 1990
SECTION 26(1), INDUSTRIAL RELATIONS ACT, 1990
PARTIES:
PENN RACQUET SPORTS LIMITED
(REPRESENTED BY THE IRISH BUSINESS AND EMPLOYERS CONFEDERATION)
AND
SERVICES INDUSTRIAL PROFESSIONAL TECHNICAL UNION
SUBJECT:
1. Claim for a wage increase under a cost saving programme.
BACKGROUND:
2. Penn Racquet Sports commenced operations in Ireland in 1974,
manufacturing high quality tennis balls for domestic and
international markets. The Company's parent is based in
Phoenix, Arizona and a further facility exists in
Jonesborough in the U.S.
In July, 1993, the Company announced its proposal to
eliminate 9 jobs. Three apprentices would not be replaced
when they 'came out of their time'. The other six jobs would
be eliminated by not recalling temporary employees.
Local level discussions took place at which the Union
submitted a claim for a share of the savings either through a
reduced working week or an increase in basic pay. The
Company rejected the Union's claim. In December, 1993, the
Company introduced the proposal changes.
The dispute was referred to the Labour Relations Commission.
A conciliation conference was held on 27th January, 1994. At
conciliation the Union sought the elimination of the grade B
scale and a lump sum compensation for the other workers. As
no agreement was reached the dispute was referred to the
Labour Court in accordance with section 26 (1) of the
Industrial Relation Act, 1990. A Labour Court hearing took
place on 5th July, 1994.
UNION'S ARGUMENTS:
3. 1. The Company is one of the largest producers of tennis
balls in Europe, producing approximately 100,000 balls
per day. Production has increased steadily over the
years with a workforce which has remained static up to
now. Under the Company's plan production targets will
be met with fewer employees.
2. Management has constantly stated that increased
efficiency would result in increased earnings. The
Union's claim is not cost increasing and under the
circumstances the workers should be compensated.
3. The Company has continuously made profits over the years
and benefited considerably from the following
productivity agreement:-
1979 - 40% increase in targets
1983 - Agreement on on-going change
1990 - Agreement on 39 hour week which was cost neutral.
1992 - Clause 3 P.E.S.P.
Under clause 3 of P.E.S.P. the Union agreed specific
changes and also an extention of an agreement on
on-going change. The 1983 agreement allowed the Company
increase production substantially through the
introduction of new machinery.
COMPANY'S ARGUMENTS:
4. 1. The programme itself is meant to be a cost reduction
programme to maintain the viability, productivity and
effectiveness of the Mullingar facility. If the Company
concedes the Union's claim for either a reduction in the
working week or an increase in pay, this would obviously
negate the whole objective and thrust of the cost
reduction programme.
2. The Company is continually striving to improve quality
and is under great competitive pressure. Changes are
necessary if the Company is to have a secure future.
That future will only be secure if the Company can be
put on a competitive and efficient footing. This will
not occur if the union persists in making onerous and
spurious claims.
3. "Full Time" employees are not directly affected by the
cost reduction programme.
4. The Union's claim is a cost increasing one and contrary
to PESP.
RECOMMENDATION:
Having examined the submissions from the parties and taking into
account the circumstances at present pertaining in the industry,
the Court has considered it would not be justified in recommending
concession of the Union's claim for an increase in basic rates.
~
Signed on behalf of the Labour Court
29th July, 1994 Evelyn Owens
F.B./D.T. __________________
Deputy Chairperson
Note
Enquiries concerning this Recommendation should be addressed to
Mr. Fran Brennan, Court Secretary.